(Instituto Escolhas)...Bolsonaro made a foray into gold dig-ging, as stated in the biography written by Luiz Maklouf Carvalho, O cadete e o capitão: A vida de Jair Bolsonaro no quartel

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Discussion PapersMay | 2020

04

The newgold rushin theAmazon:

Where illegal gold diggers, financial institutions, and

flawed monitoring come together and

invade the forest

Instituto Escolhas produces studies and reviews on

Economics and the Environment in order to enable

sustainable development.

Organized by: Instituto Escolhas

Research and Text:

Marta Salomon

Editorial Coordinator:

Salete Cangussu and Sergio Leitão

Text Editor:

Salete Cangussu and Sergio Leitão

Translate by Plataform Cipó

Art Editor: Brazz Design

Cover Photo: Felipe Werneck/Ibama

Creative Commons Licence

This work is licenced under a Creative Commons

Attribution-NonCommercial 4.0 International Licence.

Cover: Ibama’s Specialized Inspection Group (GEF)

conducts an operation against illegal gold digging in the

Kayapó Indigenous Land in the state of Pará, Brazil

www.escolhas.org/en/

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Discussion PaperMay | 2020

3

José Antônio Pereira dos Santos de-

scribes himself as a “son of God” in his

Facebook profile. He was granted his first

licence for small-scale gold digging (PLG)

in the municipality of Itaituba, in the state

of Pará, in February of this year, and he

already ranks as one of the country’s top

collectors of the Financial Compensation

for Mineral Exploration (CFEM)1 royal-

ty levied on gold. In the National Mining

Agency (ANM)’s ranking, which is topped

by giant gold mining companies such as

Canada’s Kinross and South Africa’s An-

gloGold Ashanti, as well as by financial

market institutions, Santos is the first pri-

vate individual on the list, ranked 42nd in

the overall standings in 2020. At 64 years

old, of which 50 were spent in the Tapajós

gold digging region in the southwest of

Pará state, he views the monthly produc-

tion of nearly five kilos through his first

licence as just the beginning of a new age.

“The price of gold went up, whereas

the price of fuel went down. And thanks

to the help the government has provid-

ed to the gold diggers, we are going to

produce a lot more,” he says. Santos is

one of the main characters in what is

deemed a new gold boom, fed not only

by the pursuit of ‘safe haven’ assets in

times of financial crisis caused by the

novel coronavirus pandemic, but also

by a drive to legalize gold digging and to

loosen gold-digging-related environmen-

tal monitoring. The epicentre of this par-

ticular landscape is in the Amazon.

Gold digging2, the subject matter of

this paper, accounts for nearly 20% of

the overall gold produced in Brazil since

the 1990s, according to data gathered by

experts in the field. There are no accurate

figures on illegal gold production, since

only part of it is accounted for in official re-

cords. Officially, during the last two years,

Brazil produced 85 tons of gold (1). In the

first four months of 2020, export figures

grew 14.9% compared to the same peri-

od in 2019, an increase prompted by the

rise in metal prices. According to foreign

trade data compiled in May, 28.95 tons of

gold (2) were exported.

Photo caption: Ibama’s Specialized Inspection Group (GEF) deactivates illegal gold mines in protected areas in the state of Pará. Photo: Felipe Werneck/Ibama

1 The CFEM is the tax collected on mineral resource profits, which make up part of the Union’s assets. Tax rates depend on the mineral that is extracted. Currently, a 1.5% tax rate is levied on gold.2 The main difference between gold digging and industrial production is in the scale of these activities. Gold digging sites already rely on heavy machinery, although they are referred to as artisanal. Nevertheless, they cannot use explosives or carry out underground gold extraction, according to the draft version of the Small-Scale Gold-Digging Licence regulatory act submitted to the ANM for public comments, which also requires that gold diggers rehabilitate their sites.

The new gold rush in the Amazon

Paracatu

PorteirinhaRiacho dos Machados

SabaráConceiçãodo Pará

Santa Bárbara

CrixásNova Xavantina

Pilar de Goiás

Poconé

Pontes e LacerdaNossa Senhorado Livramento

Peixoto de Azevedo

Matupá

Godofredo Viana

Pedra Branca do Amaparí

Jacobina

Barrocas

Itaituba

Novo Progresso

4

Discussion Paper (Instituto Escolhas)

MUNICIPALITIES WITH THE HIGHEST GOLD PRODUCTION, ACCORDING TO THE CFEM

Total operation amount CFEM collected

1 PARACATU - MG 1.173.404.540,18 17.601.068,11

2 ITAITUBA - PA 826.055.723,89 12.890.507,67

3 SABARÁ - MG 527.589.448,35 7.929.652,29

4 JACOBINA - BA 399.058.499,44 5.985.877,49

5 SANTA BÁRBARA - MG 305.606.731,77 4.585.957,90

6 GODOFREDO VIANA - MA 305.578.006,53 4.583.670,10

7 CRIXÁS - GO 260.620.422,51 3.927.078,71

8 PEDRA BRANCA DO AMAPARI - AP 257.319.865,80 3.859.797,99

9 PEIXOTO DE AZEVEDO - MT 193.962.465,17 2.924.036,73

10 BARROCAS - BA 155.954.475,15 2.340.660,39

11 POCONÉ - MT 124.138.273,64 1.877.367,26

12 NOSSA SENHORA DO LIVRAMENTO - MT 101.511.343,11 1.564.319,87

13 PONTES E LACERDA - MT 100.046.243,53 1.541.328,16

14 MATUPÁ - MT 92.877.503,55 1.399.196,23

15 RIACHO DOS MACHADOS - MG 83.248.086,42 1.248.721,30

16 CONCEIÇÃO DO PARÁ - MG 81.054.632,54 1.215.819,49

17 NOVO PROGRESSO - PA 62.607.376,73 943.163,53

18 PILAR DE GOIÁS - GO 61.417.025,66 921.255,39

19 NOVA XAVANTINA - MT 55.798.213,95 1.063.785,16

20 PORTEIRINHA - MG 49.153.553,34 737.303,30

Paracatu

PorteirinhaRiacho dos Machados

SabaráConceiçãodo Pará

Santa Bárbara

CrixásNova Xavantina

Pilar de Goiás

Poconé

Pontes e LacerdaNossa Senhorado Livramento

Peixoto de Azevedo

Matupá

Godofredo Viana

Pedra Branca do Amaparí

Jacobina

Barrocas

Itaituba

Novo Progresso

5


1

20

2

3

4

5

6

7

18

19

8

910

11

1213

14

15

16

17

Source: ANM, compiled on May 5. Available at https://sistemas.anm.gov.br/arrecadacao/extra/relatorios/cfem/maiores_arrecadadores.aspx

6


Gold export historical time series in USD, cumulative from January to April

José Antônio Pereira dos Santos

wants to purchase more machines for

a 500-hectare plot at the São João gold

mine, which is located along a branch

of the Transgarimpeira Highway3 amid

several conservation units established in

the Tapajós region in an attempt to curb

deforestation after another highway, BR-

163, which connects Cuiabá (in the state

of Mato Grosso) to Santarém (in the state

of Pará), was paved. Santos claims that

he has owned the plot since 1989; it was

split up into ten parts in order to meet

land restrictions imposed by the Small-

Scale Gold-Digging Licence. He built a

landing and take-off strip, something

very common in the region. By February

2020, however, he still had not managed

to obtain a licence to start digging for

gold. He has 236 additional small-scale

gold-digging licence requests still pend-

ing approval.

In his plans to expand gold digging,

he praises President Jair Bolsonaro. “I

voted [for President] on the husband of

that woman who works on TV,” he says,

referring to former Democratic Labor

Party (PDT) presidential nominee Ciro

Gomes. “I regretted it. Bolsonaro has

3 At 193 kilometres-long long, the "Transgarimpeira" interstate highway was built in the last years of Brazil’s military dictatorship (1964-1985), with the aim of facilitating gold diggers’ access to the gold digging area in southeast Pará state. It connects the town of Moraes Almeida, on the banks of highway BR-163, to the town of Creporizão, both of them located in the municipality of Itaituba, in the state of Pará.

USD 1.2 Billion

USD 1.1 Billion

USD 1 Billion

USD 900 Million

USD 800 Million

USD 700 Million

USD 600 Million

USD 500 Million

Valo

r

Frequency: Monthly Annual

Jan-Apr/2009 Jan-Apr 2010 Jan-Apr/2011 Jan-Apr/2012 Jan-Apr/2013 Jan-Apr/2014 Jan-Apr/2015 Jan-Apr/2016 Jan-Apr/2017 Jan-Apr/2018 Jan-Apr/2019 Jan-Apr/2020

Cumulative Type: Amount in USD FOB Weight Graph: Line BarsPrice

Photo caption: José Antônio Pereira dos SantosWhatsApp profile picture taken on May 2, 2020

Source: Ministry of Economy, Comex System, Statistics available at <http://comexstat.mdic.gov.br/pt/comex-vis>.

7


helped a lot. His father was a gold digger,

he knows what it’s about, he is with the

people. He knows that gold digging cre-

ates a lot of jobs, keeps people away from

crime,” he believes.

Santos is mistaken about the Pres-

ident’s father: Percy Geraldo Bolsonaro

was actually an informal dentist. Howev-

er, long before taking office as President,

supporting gold diggers against what he

deems excessively harsh environmental

policies, and drafting a bill to regulate

mineral resources in indigenous lands,

Bolsonaro made a foray into gold dig-

ging, as stated in the biography written

by Luiz Maklouf Carvalho, O cadete e

o capitão: A vida de Jair Bolsonaro no

quartel (“The cadet and the captain: The

life of Jair Bolsonaro in the barracks”).

Maklouf writes that, in 1983, while on

leave from the Army, the then-soldier

travelled to a gold-digging region in the

state of Bahia. He was 28 years old,

and the trip earned him written nega-

tive remarks by his senior officials: “He

displayed signs of immaturity in being

enticed to venture into gold digging ac-

tivities... he showed excessive ambition.”

José Antônio Pereira dos Santos

was granted his first land title for ten of

the 246 plots of land he has been bid-

ding for during the past three decades--

amid a push by the government to expe-

dite small-scale gold-digging licences,

thereby satisfying increasing demands

from gold diggers. Shortly after Presi-

dent Bolsonaro took office, agents from

the Brazilian Institute of the Environ-

ment and Renewable Natural Resourc-

es (Ibama) taking part in an operation

against illegal gold mining in the Tapajós

region set fire to machinery in two feder-

al conservation units. While complaining

about “massive losses” caused to illegal

gold diggers and calling for the first-ev-

er protest against Ibama operations, in

March 2020, Portal Giro website, a news

site from Itaituba, estimated there were

approximately 2,700 illegal gold mining

sites, with some 27,000 unregulated

workers in the Tapajós region (3).

Photo caption: Ibama’s Specialized Inspection Group (GEF) deactivates illegal gold digging machinery in the Munduruku Indigenous Land, in the state of Pará Photo: Vinícius Mendonça/Ibama

8


Destruction of heavy machinery is

allowed under a 2008 decree (4) that

regulates the Environmental Crimes Law,

whenever it is impossible to remove that

equipment from the forest. It is a way

of curbing illegal gold-digging opera-

tions, since machinery that is seized and

placed under custody ends up being re-

deployed. In 2019, the Brazilian Institute

of Environment and Renewable Natural

Resources (Ibama) estimated that 72

machines used by illegal gold diggers and

loggers were destroyed, a figure signifi-

cantly lower than the 201 machines that

were registered in 2015 during inspection

operations in protected areas.

Gold diggers’ complaints were en-

dorsed by the President of the Republic

and garnered support from government

offices in Brasília, particularly after pro-

testors blocked highway BR-163 during

the first two weeks of September. In

November 2019, an ordinance issued

by ANM (5) introduced a work plan that

would entail a “swift” solution to the “se-

rious issue of gold digging sites in Brazil”,

especially in the Tapajós region.

The work plan was a response to a

question posed by the agency itself the

previous month in a technical note ad-

dressed to the President's Office of the

Chief of Staff, which coordinated negotia-

tions with illegal gold diggers’ representa-

tives: “Does the country wish to continue

pursuing this wealth, considering that to-

day this activity is undertaken mainly by

means that are illegal, technically flawed,

with significant waste and serious impli-

cations to workers’ health and safety, in

addition to causing serious setbacks to

the environment?” (6)

After the ordinance with the new

work plan included was issued, the ANM

expedited assessments of applications

for small-scale gold-digging licences

and cleared areas for new applications,

dismissing part of the requirements. In

spite of the remote working imposed in

March due to the Covid-19 pandemic, in

April 2020 alone the ANM granted five

additional licences for the Cooperativa

dos Garimpeiros de Moraes Almeida e

Transgarimpeira (Moraes Almeida and

Transgarimpeira Highway Gold Diggers'

Cooperative, freely translated) to dig for

gold in a total area of 2,100 hectares,

corresponding to 21 square kilometers

in Itaituba, in the Tapajós region. In one of

these sites, cassiterite extraction will also

be allowed. Data on the licences was col-

lected through the Access to Information

Law (LAI).

Guilherme Aggens, a forestry engi-

neer at the Geoconsult company (Ge-

ology, Mining and Environmental Ser-

vices) who works in the clearing of gold

digging sites for operation in Itaituba,

likes to distinguish illegal gold digging, in

integral protection conservation units or

in indigenous lands, from irregular gold

digging, which is carried out without au-

thorization. “Gold will come out, we have

to know whether it comes out legally or

illegally. Some people arrive in planes,

with money, and take the gold away. It is

impossible to know exactly how much of

it is legal and how much is not. Actually,

there is no way of knowing.”

Geoconsult tracked active gold

mines from August 2018 to August 2019

in the municipality of Itaituba. The map

below shows legal, irregular, and illegal

gold digging sites. These three types of

digging sites accounted for an overall

area of little more than 6,000 hectares.

An equivalent to 0.1% of the total area

of the municipality is taken up with this

kind of activity, which dominates the re-

gion’s economy. Although the scale of

the gold digging sites has been used as

an argument in favor of this activity, the

map clearly shows that gold diggers have

been operating inside integral protection

“Does the country wish to continue pursuing this wealth, while taking into consideration

the fact that said pursuit, today, occurs mainly by means that

are illegal, technically flawed, with significant waste and

serious implications to workers’ health and safety, in addition to causing serious setbacks to the

environment?”.

4 Law No. 9.985/2000, which established the National System of Conservation Units (SNUC), determined two types of conservation units: integral protection conservation units, where gold digging is forbidden, and sustainable use units. In the latter type, gold digging is still prohibited in Extractive Reserves and in Private National Heritage Reserves, and restricted in conservation units established after the SNUC law was drafted, in accordance with both the ANM and the General Attorney’s Office (AGU). National parks comprise the first group, while national forests are included in the second.

9


2018-2019 ITAITUBA SMALL-SCALE GOLD DIGGING RECORDS, INCLUDING UNREGULATED AND ILLEGAL GOLD DIGGING SITES

Source: Geoconsult

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10


conservation areas, where such activities

are forbidden,4 as well as in National For-

ests (Flonas), where mining is also not

permitted. Whether or not to clear gold

digging activities in sustainable use con-

servation units is one of the issues being

debated by the government.

When legally and illegally sourced gold are melded and enter the financial market

Small-scale gold-digging licences

(PLG) issued by the ANM permit mineral

exploitation. Nevertheless, they can both

endorse the legitimacy of a gold digging

site’s operations or help launder illegal-

ly extracted gold from indigenous lands

and conservation units. This is described

in detail as a “broad and continuous crim-

inal enterprise” for purchasing illegally

extracted gold in a complaint filed by the

Public Prosecutor’s Office in Santarém,

in the state of Pará, in May 2019.

The complaint results from a joint

operation carried out by the Public Pros-

ecutor’s Office and the Federal Police

(PF) and baptized “Midas' Dilemma".

From January 2015 to May 2018, inves-

tigations tracked a near 611-tonne pur-

chase of illegally sourced gold exceeding

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R$ 70 million. According to prosecutor

Luís de Camões Boaventura, the oper-

ation--one of the biggest investigations

on gold digging--shed light on the lack of

control over the economic chain of ille-

gally mined gold.

The complaint shows that, since ex-

tracting minerals without the respective

PLG licence is a crime, introducing illegal-

ly sourced gold into the legal market with

the aim of using it as a financial asset in

the future is done through a licence that is

unrelated to the digging area. The investi-

(7)

11


CFEM gold royalty collection

2010 32.097.234,35

2011 37.795.108,29

2012 49.918.345,17

2013 55.520.166,89

2014 55.531.365,51

2015 70.358.329,37

2016 81.709.808,78

2017 65.382.281,34

2018 142.100.721,80

2019 201.225.539,32

2020* 86.121.867,15

Ranking of Brazil’s top CFEM gold royalty collectors

1 Kinross Brasil Mineração S A 1.173.404.540,18 17.601.068,11

2Anglogold Ashanti Córrego do Sítio Mineração S.a.

727.700.398,29 10.932.539,91

3F. D'GOLD - DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA

490.506.162,49 7.398.337,74

4Jacobina Mineração e Comércio Ltda

399.058.499,44 5.985.877,49

5 Mineração Aurizona S.a. 305.578.006,53 4.583.670,10

6 Mineração Serra Grande S.a. 260.620.422,51 3.917.129,99

7 MINA TUCANO LTDA. 257.319.865,80 3.859.797,99

8CONFIANCA COM. DE METAIS E REP. LTDA

192.677.647,82 3.261.334,39

9Mineração Serras do Oeste Eireli

191.067.226,31 2.866.913,35

10O.M Distribuidora de Títulos e Valores Mobiliários Ltda

186.951.007,81 2.809.693,44

11 carol dtvm ltda 171.526.259,53 2.585.608,75

12Fazenda Brasileiro Desenvolvimento Mineral Ltda.

155.954.475,15 2.340.660,39

13Mineração Riacho dos Machados Ltda.

132.401.639,76 1.986.024,60

14 Mineração Apoena S A 121.110.280,87 1.904.830,08

15 PARMETAL DTVM LTDA 105.290.505,38 1.586.759,27

16coluna sa distribuidora de titulos e valores mobiliarios

98.342.566,51 1.475.200,84

17 Serabi Mineração S.a. 77.684.793,01 1.201.167,07

18Pilar de Goias Desenvolvimento Mineral S.a.

63.805.108,94 957.076,65

19 Salinas Gold Mineração Ltda 62.490.012,45 982.706,23

20 NX GOLD S A 55.798.213,95 1.063.785,16

21RBM RECUPERADORA BRASILEIRA DE METAIS LTDA

41.979.180,21 638.712,56

22Cooperativa de Garimpeiros de Ourilandia e Regiao

40.017.422,93 612.614,33

23 Mineração Tabiporã Ltda 39.198.377,57 627.621,92

24 Fides Gold Mineradora S.A. 33.801.359,19 508.414,85

25JAAY CONSULTORIA E METAIS EIRELI ME

28.817.791,25 432.641,47

26RBM - RECUPERADORA BRASILEIRA DE METAIS S.A

23.749.442,96 356.954,14

27Coluna S/A Distribuidora de Títulos e Valores Mobiliários

23.301.477,81 349.522,22

gations revealed that the true origin of the

gold traded in Santarém was the Pirarara

Digging Site, located in the buffer zone of

the Indigenous Land of the Zo’é (a recent-

ly contacted indigenous people), in the

municipalities of Óbidos and Oriximiná.

The lawsuit proposed by the Public

Prosecutor’s Office to Brazil’s Federal

Courts reports the managing partner

and employees of a gold-buying post in

Santarém belonging to the securities dis-

tributor company OM Distribuidora de

Títulos e Valores Mobiliários (DVTM), a fi-

nancial institution also known as Ouromi-

nas. One year after the complaint was

filed, not only is OM DTVM still operating,

it also ranks tenth among CFEM collec-

tors, which has been growing throughout

this decade. By the end of April 2020, it

had collected R$ 186.9 million in gold roy-

alties. Ourominas claims that franchisee

RN Participações is responsible for the

illegally sourced gold.

Source: ANM, compiled on May 9 – https://sistemas.anm.gov.br/arrecadacao/extra/relatorios/arrecadacao_cfem_substancia.aspx

12


28CONFIANCA COM DE METAIS E REP LTDA

19.305.622,62 349.572,10

29 Carol DTVM ltda 15.271.314,14 229.639,47

30 Euromaquinas Mineração Ltda 15.234.811,23 228.522,17

31 Avb Mineração Ltda. 13.621.105,00 207.071,82

32 REAL BRASIL METAIS LTDA 12.301.655,50 186.710,05

33COMERCIO DE METAIS PRECIOSOS OURO BRASIL LTDA

11.441.290,38 210.511,08

34 J. P. DA SILVA DTVM 10.295.786,42 154.436,80

35FNX COMÉRCIO DE METAIS LTDA

10.275.097,05 167.041,03

36RBM RECUPERADORA BRASILEIRA DE METAIS SA

9.681.491,42 160.766,25

37 J V UCHOA EIRELI 6.413.300,97 96.199,52

38 carol dtvm ltda 3.168.305,40 47.619,63

39Cooperativa de Mineração dos Garimpeiros do Lourenço Ltda

3.053.807,31 60.344,90

40Santa Luz Desenvolvimento Mineral Ltda

2.807.015,15 49.344,75

41Cooperativa de Mineração dos Garimpeiros de Pontes e Lacerda

2.300.001,24 34.496,57

42 José Antõnio Pereira dos Santos 2.280.186,18 34.202,80

43PENA E MELLO COMERCIO E EXPORTAÇÃO LTDA

2.122.356,54 31.905,38

44Cooperativa dos Garimpeiros Mineradores e Produtores de Ouro do Tapajós

2.005.968,83 30.303,17

45G. GABRIEL PEREIRA DE FARIAS

1.745.774,18 26.372,54

46 Marcos José Martins Fernandes 1.087.957,30 16.333,24

47 ADÃO AFONSO RODUÍ 801.617,29 12.150,51

48 ATRESS EXPORTADORA LTDA 653.644,36 9.813,66

49Cooperativa dos Garimpeiros do Vale do Rio Peixoto COOGAVEPE

607.038,24 9.107,75

50PENNA & MELLO COMERCIO E EXPORTAÇÃO

592.939,49 8.894,09

The criminal lawsuit is still pending

trial, one year after the complaint was

filed by the Public Prosecutor’s Office

(MPF). However, OM DTVM terminated

its association with the National Gold

Association (Anoro) “six months ago,”

according to the President of the organi-

zation, Dirceu Santos Frederico Sobrin-

ho, who nevertheless did not discuss the

content of the complaint. Anoro’s main

members are Central Bank-accredited

institutions that trade gold as a finan-

cial asset, such as Securities Distribu-

tor companies (DTVMs). Most recent-

ly, it started accepting gold diggers as

members and began targeting Ibama

inspectors. They share more than just

common goals.

Anoro’s President, who owns F

D’Gold DVTM--the third largest CFEM

gold royalty collector in the first four

months of 2020 nationwide--heads the

main lobby aimed at legalizing gold dig-

ging, an activity he is familiar with since

the 1980s. Shortly after establishing the

Tapajós Gold Mining Reserve,5 in 1983,

Dirceu started buying gold in the region.

Shortly thereafter, he purchased his first

gold digging site in Itaituba, a municipal-

ity where he served two terms as the En-

vironment Secretary.

Illegally extracted gold traded in the

financial market is a fact, the President

of Anoro acknowledges. “There will al-

ways be risk exposure. There is no way

of fully monitoring the origin [of gold].

Law [12.844, issued in 2013] requires

gold to be sold at the place closest to its

source. We have no way of knowing if it

does come from there or not”, he says,

arguing that a national registry of gold

diggers must be established in order to

ensure operational transparency.

5 The Tapajós Gold Digging Reserve was established through decree number 882, which was drafted by former Minister of Mines and Energy César Cals on July 23, 1983. Gold digging sites started operating in the region in the late 1950s.

Source: ANM, compiled on May 9 - https://sistemas.anm.gov.br/arrecadacao/extra/relatorios/cfem/maiores_arrecadadores.aspx

13


In a videoconference call from his

São Paulo office, the President of Anoro

endorsed criticisms levied at how envi-

ronmental inspectors operate. “Instead

of setting fire to machinery in gold dig-

ging sites, it would be smarter for Ibama

and National Force helicopters to fly over

there and take brochures, as opposed to

machine guns. Employees would thus be

able to encourage gold diggers to operate

in regulated markets. I can assure you, as

a champion of gold digging activities, that

70% of them would comply. This is the

ideal moment. The government is mak-

ing an effort. It is not an easy fight, but

this is the most suitable time,” he affirms.

For the gold digging lobby, the activity must take place first in protected areas, then in indigenous lands The President of Anoro has been a regular

at government offices in Brasília since the

second semester of 2017, according to the

“Anoro Book”, a document published in

website Garimpo 4.0, although it still of-

fers restricted access and requires a pass-

word. Hearings held in the federal capital

intensified starting in the second quarter

of 2019, after President Bolsonaro took of-

fice. In addition to meetings with the Pres-

ident of the ANM, Victor Bicca, the book’s

chapter “Esforço concentrado” (“Concen-

trated Effort”) lists meetings at the Presi-

dency’s Office of the Chief of Staff, as well

as with Mines and Energy Minister Bento

Albuquerque and Environment Ministry

Ricardo Salles. The lobby did not work re-

motely. On the eve of May 1, 2020, with the

coronavirus pandemic in full swing, Dirceu

Santos met in Brasília with members of

the Amazon Council, chaired since Feb-

ruary by Vice President Hamilton Mourão,

with whom he had already met.

The “Anoro Book” (8) describes the

organization’s main proposal in detail:

to establish a national registry of gold

diggers, which would be in charge of un-

dertaking a census of gold diggers and,

above all, of ensuring transparency for

Brazil’s obscure gold market. Through a

technical cooperation agreement signed

with the regulatory agency in 2017, Anoro

commits to paying for the costs of the

registry, which would enhance monitor-

ing of both the source and destination of

gold, while sharing information with the

Central Bank and the Federal Revenue

Service. For the time being, the idea of

creating a registry is still pending a de-

cision, and there is still no timeframe for

the drafting of the proposal.

Before delving into the idea of the

registry, however, Anoro’s publication

dedicates a great deal of space to an

issue that is very dear to the organiza-

tion: the conflict between conservation

units established in the 2000s, and the

boundaries of the Tapajós Gold Dig-

ging Reserve’s 28,700 square kilome-

tre grounds, as seen in the map below,

produced by Anoro. The document de-

scribes what it deems “conservation

efforts invading gold digging reserves.”

The document makes it clear that gold

digging would be prioritized over environ-

mental protection.

The protection areas that the gold

market representatives complain about

were established within the context of

the Regional Sustainable Development

Plan for the BR-163 Cuiabá-Santarém

Highway Area of Influence, also known

as the Sustainable BR-163 Plan. In order

to curb deforestation along the banks

of the highway, 4.9 million hectares of

sustainable use conservation units were

marked off. In addition to the Tapajós En-

vironmental Protection Area, where gold

digger José Antônio Pereira dos Santos

and many others were granted licences

to carry out gold-digging activities, there

are the Amana, Jamanxin, Crepori, and

Trairão National Forests (Flonas). These

areas are located between conservation

units where gold digging was not permit-

ted at the time that said conservation

units were built. To clear these lands for

gold digging, Anoro presses the Attor-

ney General’s Office to revise its position

on the matter.

Expert opinion report no. 21, issued

in 2014, argues that mineral exploita-

tion is prohibited in National Forests

(Flonas), even in those established be-

fore 2000, if the activity is not clearly in-

cluded at the time the conservation unit

was established (9).

Additionally, the Sustainable BR-163

Plan set apart 1.9 million hectares of inte-

gral protection conservation units, which

do not permit economic activities. The

Amazônia National Park was expanded,

and the Jamanxim and Rio Novo Nation-

al Parks, in addition to the Nascentes da

Serra do Cachimbo Biological Reserve,

were created. All gold digging deeds are

currently embargoed in park and nation-

al forest areas.

Photo Caption: The President of Anoro, Dirceu Santos Frederico SobrinhoSource: YouTube frame capture – House of Representatives’ Mine and Energy Commission video (November 1, 2019)

14


Conservation units within the perimeters of the Tapajós Gold Digging Reserve

Source: Anoro, Garimpo 4.0

“This Plan came about ignoring the

fact that the main economic activity

along the 1,000 km-long highway is gold

digging. The world's navel is located in

the Tapajós region, which was home to

the world’s oldest volcano and is rich

in minerals,” Dirceu Santos argues. The

President of Anoro believes that “geodi-

versity comes before biodiversity: you

can move a forest, but you can’t move a

gold mine or a reservoir,” he concludes.

Gold digging in the Tapajós region,

according to the Sustainable BR-163

“Geodiversity comes before biodiversity: you can move a forest, but you can’t move a

gold mine or a reservoir”.Dirceu Santos,

President of Anoro

15


6 Bill no. 191/2020 is currently being appraised at the House of Representatives and features several controversial points, such as the possibility, set out under article 14, for the President of the Republic to request approval for business ventures in indigenous lands “against the will of the impacted indigenous communities,” as long as justifications are provided. Another controversial point is a plan to expedite mineral resource research and extraction conferred before the indigenous land was officially ratified.

Plan, was a decadent activity that could

be replaced by forest-based options,

even though a two million-hectare land

was set aside for mineral extraction

(10). About Dirceu Santos’ remark, even

though forests can be planted, there are

no known accounts of forests being suc-

cessfully “moved.”

The government previously consult-

ed with Anoro prior to Bill no. 1916/ 2020,

which regulates mineral exploration in in-

digenous lands, and which was sent to the

National Congress in early February of this

year. The association finds that, although

gold digging in indigenous lands “is a real-

ity,” the activity must be suspended until

a new law with exploration guidelines is

passed so as to prevent illegally extracted

gold from indigenous lands from entering

the market. “It is an actual risk. We defend

that legalization is the best option, be-

cause everyone wins. However, we should

first regulate within the conservation

units,” argues Dirceu Santos.

Government plans on fighting deforestation without destroying gold diggers’ machinery

With Amazon deforestation rates

suggesting new record levels may be set

in the 2020s, the federal government

plans to curb forest destruction without

using legally available resources to tack-

le one of its main driving forces, illegal

gold digging.

From May 11 to June 10, a new decree

to Guarantee of Law and Order (GLO) is

in effect to prevent and crack down on

environmental crimes committed in bor-

der regions, on indigenous lands, and in

Legal Amazon conservation units, which

make up 61% of Brazil's territory. Decree

no. 10.341/2020, which authorizes the

GLO, was issued on May 6 and signed

by Minister of the Environment Ricardo

Salles and by the Head of the Institution-

al Security Office (GSI), Augusto Hele-

no. For all practical purposes, it places

environmental inspection duties under

the control of the Army, which is unprec-

edented. Above all, it strips Ibama of its

autonomy to destroy machinery used in

gold digging, something that had both-

ered President Bolsonaro and Minister

Salles since they first took office, and

that had already prompted the firing of

three government officials in charge of

environmental inspections (11) in April,

after heavy lobbying by gold diggers and

gold market financial institutions.

Operation Green Brazil 2, whose

cost has been estimated at R$ 60 million

and deploying 4,200 soldiers and police

officers, was put together by the Ama-

zon Council, which is tasked with coordi-

nating and implementing Legal Amazon

public policies, and, since February, by

the Office of the Vice President of the Re-

public. In April, when questioned about

the increase in deforestation alerts that

had been piling up since August 2019

and that would be reflected in the next

official deforestation rates, Vice Presi-

dent Hamilton Mourão replied, through

his Press Office, that the GSI would

henceforth be in charge of running oper-

ations against environmental crimes.

During a May 11 interview about

the operation, General Augusto Hele-

no (GSI) stated that authorities would

not accept being “smeared as environ-

mental villains.” Minister Salles, in turn,

maintained that machinery seized from

gold diggers should, instead of being de-

stroyed, be confiscated and handed over

to states and municipalities.

The intervention deals with the

threat of new record-setting deforesta-

tion rates in the Amazon, following the

decade’s previous record, which was set

in 2019. During the first nine-month pe-

riod for which official deforestation rates

were computed, from August 2019 to

April 2020, forest deforestation alerts in-

creased by 94%, according to the Nation-

al Institute for Space Research (Inpe). By

undermining a legal instrument to fight

environmental crimes, the government

downplays the fact that gold digging is

one of the main driving forces behind

deforestation in the Amazon. Rates re-

corded in 2019 in the conservation units

and in indigenous lands rose by 30% and

65%, respectively, compared to the pre-

vious year, according to INPE, which will

likely disclose in November the official

deforestation rates (Prodes) for 2020.

In undermining a legal instrument provided by law to

fight environmental crimes, the government downplays the fact that gold digging is one of the main driving forces behind

the Amazon’s deforestation.

16


Cumulative deforestation rates from August to April over the past few years

Áreas por Anos

6,000

5,500

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2015/2016

3.278 km23.210 km2

2.914 km2

5.666 km2

2.936 km2

2016/2017

Reference year (August – July)

Aggr

egat

e Ar

ea (i

n sq

uare

kilo

met

res)

2017/2018 2018/2019 2019/2020

The Chico Mendes Institute for Bio-

diversity Conservation (ICMBio) points

out that gold digging’s responsibility for

deforestation in the federal conserva-

tion units surged from 17% in 2016 to

33% in 2017. The highest deforestation

rates were observed precisely in the

Tapajós Environmental Protection Area

and in the Jamanxin National Forest,

areas in the Tapajós region where activ-

ities related to gold digging have been

expanding. According to Ibama, in 2019

deforestation related to gold digging hit

a new record (13): 10,500 acres, a 23%

increase compared to the previous year.

This means that, last year, gold digging

destroyed 105 square kilometres in

conservation units. And once again, the

most affected region was Tapajós.

In response to a request made via the

Access to Information Law (LAI) about

gold digging in the Yanomani Indigenous

Land, in the state of Roraima, the ANM

acknowledged that a series of opera-

tions carried out during several decades

had failed to put an end to gold digging in

the territory. Although Operation Ágata, a

joint effort by the Army, the Federal Police

and Ibama, was carried out two to three

times each year, “it never succeeded in

stopping all gold digging activities” in the

region, according to the agency.

Last April, another Federal Police op-

eration led to a complaint being filed by

the Public Prosecutor’s Office against a

criminal organization that traded illegal-

ly sourced gold. According to an inquiry

from Operation Jardim das Hespérides

(14), the defendants moved at least 1.2

tons of gold overseas. “In this particular

situation, the AN-M-RR contributed with

technical data and concluded that this

gold was extracted from illegal gold dig-

ging sites in the Yanomani Indigenous

Land, as well as in gold digging sites run

by Brazilians working in Guyana and

Venezuela,” the agency added. The gold

was bound for India, one of the most

common destinations for gold produced

in Brazil, alongside Canada and the Unit-

ed Kingdom. The lawsuit is under confi-

dential review at the state of Roraima’s

Court of Federal Justice.

The State’s efforts have not sufficed

to effectively curb the trade of illegally

sourced gold, concludes the public civil

action complaint (15) filed by the Public

Prosecutor’s Office in Santarém, in the

state of Pará, in July 2019, which also

concerns the National Mining Agency

and the Central Bank. According to the

complaint, the Tapajós and Jari River

Basins are the regions in the country

where illegal gold digging activities are

expanding most rapidly, and it urges the

government to take measures.

Is it possible to talk about environmentally sustainable gold digging?

Advocates of regulating gold digging

in protected areas argue that this activi-

ty is a reality, and that “everybody” would

win if the activity were legalized and if

taxes were collected. This win-win mind-

set, however, fails to take into account

Source: TerraBrasilis. Alert Dashboard. Deter, Legal Amazon, monthly aggregate rates. Available at: http://terrabrasilis.dpi.inpe.br/app/dashboard/alerts/legal/amazon/aggregated/.

17


the damage caused to the environment,

which is not restricted to deforestation.

Technical Report 091/2018 (16) from

the Federal Police’s Operation Levigação

estimates that seven million tons of sed-

iment have been released into the Tapa-

jós River Basin as a result of gold digging

carried out near the river’s tributaries.

The technical report compares these fig-

ures with the estimated 84 million tons of

tailings that were released into the Doce

River Basin after the Samarco dam col-

lapsed in Mariana, in the state of Minas

Gerais, in November 2015.

“In the case at hand, regarding gold

digging sites in the Tapajós River Basin,

the discharge is estimated at at least

seven million tons per year, which would

be the same thing as saying that, every

11 years, gold digging sites release the

same quantity of solid residues into

the Tapajós River that Samarco poured

into the Doce River after its tailings dam

ruptured. If the figures are converted to

volume, this ratio becomes even higher,

since the density of Mariana’s iron ore

tailings is significantly greater than that

of the Tapajós River Basin’s soil," con-

cludes the 2018 Technical Report.

The Federal Police did not measure

mercury contamination in the waters

of the Tapajós River, whose colour has

turned bluish due to accumulated sedi-

ment. A supporter of legalizing gold dig-

ging in the region, forestry engineer Guil-

herme Aggens claims that, due to the fact

that mercury is expensive, at “R$ 1,500

per kilo,” gold diggers use it with restraint

in “controlled environments.”

This is not, however, what studies

on mercury contamination in fish and

Amazon riverside populations show. The

National Inventory of Mercury Emissions

and Releases in Artisanal and Small-Scale

Gold Digging in Brazil, published in 2018,

estimates that the quantity of mercury

related to gold digging that was released

into the atmosphere in 2016 ranged from

11 to 161 tons. This figure is inaccurate due

to the difficulty in estimating the scope of

gold digging. The study also finds that

gold diggers manage to recover around

half of the metallic mercury they use in

their activities (17).

The new gold rush in the Amazon,

defined by an increase in the demand

for a ‘safe haven’ asset in times of finan-

cial crisis as well as by a political environ-

ment that endorses gold digging, is a risky

move. A risk for the transparency of the

source of the financial asset and, above

all, for protected areas in the Amazon, re-

gardless of whether they are indigenous

lands or conservation units.

This Discussion Paper has shown

how gold that is illegally extracted from

protected areas ends up in the regulated

market, as recognized by the President

of Anoro and owner of one this market’s

major operating security distributor com-

panies (DTVMs). The study also sheds

light on the lobby that brings together

gold diggers and institutions in their quest

against the destruction of machinery

seized in gold digging sites. And, most im-

portantly, it suggests that the frontier of

gold digging is increasingly overstepping

the boundaries of Conservation Units.

This is not a simple issue to solve.

However, by clarifying the interests at

stake, the discussions on this issue may

move forward. Who benefits from the

legalization of gold digging in protected

areas?

18


Note: In this paper, financial institutions are Central Bank-accredited institutions that trade gold as a financial asset, as is the

case with Securities Distributor companies (DVTMs).

Reference Notes

1) Emerging Market. Gold Production in Brazil. United States Geological Survey ISI Emerging Markets (Emerging Markets.

Produção de Ouro no Brasil. United States Geological Survey ISI Emerging Markets). Available at https://www.ceicdata.

com/pt/indicator/brazil/gold-production. Accessed on May 10, 2010

2) MINISTRY OF THE ECONOMY. Foreign Trade Statistics (MINISTÉRIO DA ECONOMIA. Estatísticas do Comércio Exterior).

Available at http://comexstat.mdic.gov.br/pt/comex-vis. Accessed on May 10, 2020

3) Giro Portal website. Group promotes public protest in favor of Itaituba gold diggers (Giro Portal. Grupo realiza

manifestação em prol dos garimpeiros de Itaituba). March 13, 2020. Available at: https://www.giroportal.com.br/

noticias/4167-grupo-realiza-manifestacao-em-prol-dos-garimpeiros-de-itaituba

4) Decree no. 6.514 of july 22, 2008, which regulates Law no. 9.605 of February 12, 1998 (The Environmental Crimes Law)

(Decreto no 6.514, de 22 de julho de 2008, que regulamenta a Lei no. 9.605, de 12 de fevereiro de 1998 (Lei de Crimes

Ambientais) http://www.planalto.gov.br/ccivil_03/_Ato2007-2010/2008/Decreto/D6514.htm

5) The National Mining Agency. Directive no.871 of November 12, 2019 (Agência Nacional de Mineração. Portaria No.

871, de 12 de novembro de 2019) http://www.in.gov.br/en/web/dou/-/portaria-n-871-de-12-de-novembro-

de-2019-227985203

6) The National Mining Agency. Technical Note no. 11/2019/ASSTDG/DIRE-RERP (Agência Nacional de Mineração. Nota

técnica no. 11/2019/ASSTDG/DIRE-RERP) http://www.escolhas.org/nota_n_11_garimpeiros_casa_civil___v_final/

7) The Public Prosecutor’s Office – MPF Complaint. Disponível em: (Ministério Público Federal – Denúncia do MPF). Available

at: http://www.escolhas.org/denuncia_mpf_posto_compra_ouro_ourominas_maio_2019/

8) The Anoro Book (Book Anoro). Available at: http://www.escolhas.org/book-anoro/

9) The Attorney General’s Office. Expert Opinion Report No. 21 of 2014 on mining in forests (Advocacia Geral da União.

Parecer número 21, de 2014, sobre mineração em florestas). Available at: http://www.escolhas.org/advocacia-geral-da-

uniao-parecer-numero-21-de-2014-sobre-mineracao-em-florestas/

10) Technical Note 11/2019/ASSTDG/DIRE-RERP Ministry of the Environment. Sustainable BR-163 Plan (Nota Técnica no

11/2019/ASSTDG/DIRE-RERP Ministério do Meio Ambiente. Plano BR-163 Sustentável). Available at: https://www.mma.

gov.br/estruturas/sca_br163/_arquivos/plano_br_163_texto.pdf

11) GI Nature. Government fires Ibama’s head inspectors after operations against illegal gold mines (GI Natureza.

Governo exonera chefes após operações contra garimpos ilegais). Available at: https://g1.globo.com/natureza/

noticia/2020/04/30/governo-exonera-chefes-de-fiscalizacao-do-ibama-apos-operacoes-contra-garimpos-ilegais.

ghtml

19


12) ICMBio. Prodes discloses 28% drop in deforestation rates in Conservation Units. (Prodes revela queda de 28% no

desmatamento em UCs). November 14, 2017. Available at: https://uc.socioambiental.org/pt-br/noticia/184772

13) Prazeres, Leandro. Gold digging-related deforestation in the Amazon increases 23% in 2019 and hits record numbers

(Desmatamento causado por garimpos na Amazônia aumenta 23% em 2019 e bate recorde histórico). O Globo. May 5,

2020. Available at: https://oglobo.globo.com/brasil/desmatamento-causado-por-garimpos-na-amazonia-aumenta-

23-em-2019-bate-recorde-historico-1-24412968

14) RORAIMA ATTORNEY GENERAL'S OFFICE. MPF files charges in Federal Courts against 33 people for illegal gold trading

(PROCURADORIA GERAL DA REPÚBLICA EM RORAIMA. MPF denuncia 33 pessoas à Justiça Federal por comércio ilegal de

ouro). Available at: <http://www.mpf.mp.br/rr/sala-de-imprensa/noticias-rr/mpf-denuncia-33-pessoas-a-justica-

federal-por-comercio-ilegal-de-ouro>.

15) Civil Action Suit document against the ANM and which is mentioned in the final part thereof, when the ANM recognizes

the challenges of putting an end to gold digging (Documento da Ação Civil Pública que enquadra a ANM e está mencionada

na parte final, quando a ANM reconhece a dificuldade de pôr fim ao garimpo). Available at: http://www.escolhas.org/

acao-civil-publica-julho-2019-cadeia-do-ouro/

16) Federal Police export report on gold digging sites’ release of sediment into the Tapajós River (Laudo pericial da Polícia

Federal sobre o lançamento de sedimentos pelo garimpo no rio Tapajós). Available at: http://www.escolhas.org/policia-

federal-laudo-pericial-tapajos/

17) CASTILHOS, Zuleica C; DOMINGOS, Lilian M. National inventory on mercury emissions and release within the context of

artisanal and small-scale mining in Brazil. Final Report (Inventário nacional de emissões e liberações de mercúrio no âmbito

da mineração artesanal e de pequena escala do Brasil. Relatório Final). Available at: http://www.escolhas.org/inventario-

das-emissoes-de-mercurio/

Documents

(Instituto Escolhas)...Bolsonaro made a foray into gold dig-ging, as stated in the biography written by Luiz Maklouf Carvalho, O cadete e o capitão: A vida de Jair Bolsonaro no quartel